<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1 )*
-----
Utah Resources International, Inc.
------------------------------------------
(Name of Issuer)
Common Stock, $.10 par value per share
------------------------------------------
(Title of Class of Securities)
917518102
------------------
(CUSIP Number)
John Fife
President, Inter-Mountain Capital Corp.
360 East Randolph Street
Suite 2606
Chicago, Illinois 60601
312/565-1569
------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notice and Communications)
July 3, 1996
------------------------------------
(Date of Event which Requires Filing of this Statement)
<PAGE>
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box./ /
Check the following box if a fee is being paid with the statement / /. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of this section
of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SCHEDULE 13D
CUSIP NO. 917518102 Page of Pages
- -------------------------------- ------------------------------
(1) Name of Reporting Person. Inter-Mountain Capital Corp.
S.S. or I.R.S. Identification No. of Above Person. FEIN 36-4075407
---------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group* (a) / /
(b) / /
---------------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------------
(4) Source of Funds* WC and SC
---------------------------------------------------------------------------
2
<PAGE>
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
---------------------------------------------------------------------------
(6) Citizenship or Place of Organization. Delaware
---------------------------------------------------------------------------
Number of (7) Sole Voting Power. 2,500 plus 1,275,912 (50.5%)
Shares for an aggregate 50.6%
Beneficially -----------------------------------------------------------------
Owned By (8) Shared Voting Power. 0
Each -----------------------------------------------------------------
Reporting (9) Sole Dispositive Power. 2,500 plus 1,275,912 for an
Person aggregate 50.6%.
With -----------------------------------------------------------------
(10) Shared Dispositive Power. 0
---------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person.
1,278,412.
---------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares*
/ /
---------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11). 50.6%
---------------------------------------------------------------------------
(14) Type of Reporting Person* HC
---------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE,
AND THE SIGNATURE ATTESTATION.
Item 1. Security and Issuer.
This statement on Schedule 13D ("Schedule 13D"), relates to the Common,
$.10 par value per share stock of Utah Resources International, Inc. (the
"Issuer") (the "Stock"). The principal executive office of the Issuer is at 297
West Hilton Drive Suite #4, St. George, Utah 84770.
Item 2. Identity and Background.
This Schedule 13D is filed on behalf of Inter-Mountain Capital Corp., a
Delaware corporation, authorized to do business in Utah (the "Company"). The
Company's business address is 360 East Randolph Street, Suite 2403, Chicago,
Illinois 60601. John Fife, a United States citizen, is the President, sole
director and sole shareholder of the Company. John Fife's business address is
360 East Randolph Street, Suite 2403, Chicago, Illinois 60601. John Fife's
present principal occupation is that of a business owner and private investor.
During the last
3
<PAGE>
five (5) years, neither the Company nor John Fife has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
During the last five (5) years, neither the Company nor John Fife has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and consequently, neither has been nor is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding of
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the terms of the Stock Purchase Agreement, dated as of July 3,
1996, by and between the Issuer and the Company (the "Agreement"), the Company
purchased one million two hundred seventy-five thousand nine hundred twelve
(1,275,912) shares of common, $.10 par value stock of Issuer. The Company
purchased a sufficient number of shares so that it would own a fifty and
one/half percent (50.5%) ownership interest (a "Majority Interest") in the
Issuer. The Company purchased the Issuer's Stock at a purchase price equal to
Three and 35/100 Dollars ($3.35) per share for an aggregate purchase price equal
to Four Million Two Hundred Seventy-Four Thousand Three Hundred Five and 20/100
Dollars ($4,274,305.20) (the "Purchase Price"). At the Closing, which occurred
on July 3, 1996, the Company paid the Issuer Six Hundred Forty-One Thousand One
Hundred Forty-Five and 78/100 Dollars ($641,145.78). The balance of the
Purchase Price was evidenced by Purchaser's Promissory Note (the "Note"), in an
amount equal to Three Million Six Hundred Thirty-Three Thousand One Hundred
Fifty-Nine and 42/100 Dollars ($3,633,159.42). The Note bears interest at a
rate equal to the short-term applicable federal rate published by the Internal
Revenue Service. Interest on the Note is paid currently in arrears on each
anniversary of the Note. At the closing, the Company paid the Issuer an amount
equal to the first year of interest due under the Note, which amount was
discounted to the present value. Interest will be paid annually in arrears on
each anniversary of the Note, commencing with the second anniversary. The
principal and interest accrued under the Note is due and payable August 1, 2001.
The Note is secured by the Purchased Shares, as evidenced by a Stock Pledge
Agreement. Fife personally guaranteed payment of twenty-five percent (25%) of
all amounts due under the Note.
Item 4. Purpose of Transaction.
(a) Acquisition by any Person of Additional Securities of the Issuer, or
the Disposition of Securities of the Issuer.
The Issuer has granted the Company an option to acquire one hundred fifty
thousand (150,000), or more, additional shares of the capital stock of the
Issuer at an exercise price of Three and 35/100 Dollars ($3.35) per share, such
that the Company, under the terms of the options, would have, at all times, the
right to own fifty and one/half percent (50.5%) of the Issuer's Stock. The
option to acquire this stock is exercisable, upon the occurrence of certain
contingencies, for a period of ten (10) years from the date of the Closing.
Furthermore, Company from time to time may make additional purchases of the
Issuer's stock.
4
<PAGE>
(b) Extraordinary Corporate Transaction, such as a Merger, Reorganization
or Liquidation, Involving the Issuer or any of its Subsidiaries.
The Agreement contemplates that subject to applicable state and federal
securities and state corporate law, the Issuer shall cause a 1,000 to 1 share
reverse split of the Issuer's stock to the shareholders of record at Three and
35/100 Dollars ($3.35) per share, with fractional shareholders given the option
to either purchase additional fractional shares to round up to one whole share
following the reverse split or receive cash in lieu of their fractional shares.
The Company may be issued additional shares of stock at a price equal to Three
and 35/100 Dollars ($3.35) per share, so that after the reverse split the
Company may maintain its fifty and one/half percent (50.5%) majority interest in
the Issuer. Upon the occurrence of the reverse split and subject to applicable
state and federal securities and state corporate law any Issuer shares redeemed
by the Issuer pursuant to the reverse split may be acquired by the remaining
shareholders, other than the Company, on a pro rata basis, at a purchase price
equal to the pre-split Three and 35/100 Dollars ($3.35) per share.
(c) A Sale or Transfer of a Material Amount of the Assets of the Issuer or
any of its Subsidiaries.
None at this time, although the Company reserves the right to consider such
actions.
(d) Any Change in the Present Board of Directors or Management of the
Issuer, Including any Plans or Proposals to Change the Number or Term
of Directors or to Fill any Existing Vacancies on the Board.
As required by the Agreement, Gerry Brown resigned as President of the
Issuer and was elected Vice-President of the Issuer. As further required by the
Agreement, E. Jay Sheen and R. Dee Erickson resigned as directors of the Issuer,
effective July 13, 1996. David Fife and Fife were appointed directors of the
Issuer, effective July 13, 1996. As required by the Agreement, Fife was elected
President and Chief Executive Officer of the Issuer.
(e) Any Material Change in the Present Capitalization or Dividend Policy
of the Issuer.
None at this time, although the Company reserves the right to consider such
actions.
(f) Any Other Material Change in the Issuer's Business or Corporate
Structure Including but not Limited to, if the Issuer is a Registered
Closed-end Investment Company, any Plans or Proposals to Make any
Changes in its Investment Policy for which a Vote is Required by
Section 13 of the Investment Company Act of 1940.
None at this time, although the Company reserves the right to consider such
actions.
5
<PAGE>
(g) Changes in the Issuer's Charter, Bylaws or Instruments Corresponding
Thereto or Other Actions which may Impede the Acquisition of Control
of the Issuer by any Person.
None at this time, although the Company reserves the right to consider such
actions.
(h) Causing a Class of Securities of the Issuer to be Delisted from a
National Securities Exchange or to Cease to be Authorized to be Quoted
in an Inter-dealer Quotation System of a Registered National
Securities Association.
If the transactions contemplated by the Agreement are consummated, it may
cause a class of securities of the Issuer to be delisted from a national
securities exchange or cause a class of securities to cease to be authorized to
be quoted in an inter-dealer quotation system of a registered national
securities association.
(i) A Class of Equity Securities of the Issuer Becoming Eligible for
Termination of Registration Pursuant to Section 12(g)(4) of the Act.
If the transactions contemplated by the Agreement are consummated, it may
cause the Issuer to become eligible for Termination of Registration pursuant to
Section 12(g)(4) of the Act.
(j) Any Action Similar to any of those Enumerated Above.
None.
Item 5. Interest in Securities of the Issuer.
(a) See the responses to Items 3 and 4.
(b) See the response to Item 4(a).
(c) See the response to Item 4(a).
(d) No other person is known by the Company to have the right to receive
or the power to direct the receipt of dividends from, or the proceeds
from the sale of, such securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
6
<PAGE>
Please see the responses to Items 3 and 4.
Item 7. Materials to Be Filed as Exhibits.
Exhibit 1. Stock Purchase Agreement, dated as of July 3, 1996, by and
between the Utah Resources International, Inc. and Inter-Mountain Capital Corp.
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
August 6, 1996 /s/ John Fife
- ---------------------------------- -----------------------------------
Date Signature
President
-----------------------------------
Name/Title
7
<PAGE>
Exhibit 1
STOCK PURCHASE AGREEMENT
BETWEEN
INTER-MOUNTAIN CAPITAL CORP., A DELAWARE CORPORATION,
AS PURCHASER
AND
UTAH RESOURCES INTERNATIONAL, INC.,
A UTAH CORPORATION
AS THE COMPANY
8
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - PURCHASE AND SALE OF SHARES...................................... 2
Section 1.1 Closing................................................... 2
Section 1.2 Sale of Shares............................................ 2
Section 1.3 Option.................................................... 2
Section 1.4 Price..................................................... 3
ARTICLE II - REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE COMPANY............................................. 3
Section 2.1 Existence, Good Standing and Authority.................... 3
Section 2.2 Capital Stock............................................. 5
Section 2.3 Subsidiaries and Investments.............................. 6
Section 2.4 Financial Statements...................................... 6
Section 2.5 Absence of Changes........................................ 6
Section 2.6 Articles, By-laws, Books and Records...................... 9
Section 2.7 Copies of Documents....................................... 9
Section 2.8 Title to Properties; Encumbrances......................... 9
Section 2.9 Real Property............................................. 9
Section 2.10 Leases.................................................... 9
Section 2.11 Material Contracts........................................ 9
Section 2.12 Restrictive Documents..................................... 11
Section 2.13 Litigation................................................ 11
Section 2.14 Taxes..................................................... 11
Section 2.15 Absence of Undisclosed Liabilities........................ 12
Section 2.16 Insurance................................................. 12
Section 2.17 Intellectual Property..................................... 12
Section 2.18 Compliance with Laws...................................... 13
Section 2.19 Employee Benefit Plans.................................... 13
Section 2.20 Bank Accounts, Powers of Attorney and Compensation of
Employees................................................. 15
Section 2.21 Environmental............................................. 15
Section 2.22 Broker's or Finder's Fees................................. 17
Section 2.23 Intentionally Omitted..................................... 17
Section 2.24 Disclosure................................................ 17
Section 2.25 Reports................................................... 17
i
<PAGE>
ARTICLE III - REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE PURCHASER............................................... 17
Section 3.1 Existence and Good Standing of Purchaser/Corporate
Authority................................................. 18
Section 3.2 Broker's or Finder's Fees................................. 18
Section 3.3 Settlement Agreement...................................... 19
Section 3.4 SEC Filings ...............................................19
ARTICLE IV - CONDUCT OF BUSINESS; REVIEW.....................................19
Section 4.1 General................................................... 19
Section 4.2 Notices and Consents...................................... 19
Section 4.3 Conduct of Business of the Company........................ 19
Section 4.4 Exclusive Dealing......................................... 20
Section 4.5 Review of the Company..................................... 20
ARTICLE V - CONDITIONS TO PURCHASER'S OBLIGATIONS............................21
Section 5.1 Opinion of Company's Counsel.............................. 21
Section 5.2 Good Standing and Tax Certificates........................ 21
Section 5.3 Environmental............................................. 21
Section 5.4 Truth of Representations and Warranties................... 21
Section 5.5 Performance of Agreements................................. 21
Section 5.6 Company's Certificate..................................... 22
Section 5.7 Intra-Company Debt........................................ 22
Section 5.8 Resignations and Election................................. 22
Section 5.9 Proceedings............................................... 22
Section 5.10 Fairness Opinion.......................................... 22
Section 5.11 Termination Expenses...................................... 22
Section 5.12 Fife Employment Agreement................................. 22
ARTICLE VI - CONDITIONS TO THE COMPANY'S OBLIGATIONS.........................23
Section 6.1 Opinions of Purchaser's Counsel........................... 23
Section 6.2 Good Standing Certificates................................ 23
Section 6.3 Truth of Representations and Warranties................... 23
Section 6.4 Proceedings............................................... 23
ARTICLE VII - SURVIVAL OF REPRESENTATIONS; INDEMNITY.........................24
Section 7.1 Survival of Representations and Covenants................. 24
Section 7.2 Indemnification........................................... 24
ii
<PAGE>
ARTICLE VIII - POST-CLOSING COVENANTS........................................25
Section 8.1 Litigation Support........................................ 25
Section 8.2 Transition................................................ 25
Section 8.3 Confidentiality........................................... 25
Section 8.4 Restrictions on Transfers of Note......................... 26
Section 8.5 Reverse Split............................................. 26
ARTICLE IX - INTENTIONALLY OMITTED...........................................28
ARTICLE X - MISCELLANEOUS....................................................28
Section 10.1 Expenses................................................. 28
Section 10.2 Governing Law............................................ 28
Section 10.3 Jurisdiction............................................. 28
Section 10.4 Captions................................................. 28
Section 10.5 Publicity................................................ 28
Section 10.6 Notices.................................................. 28
Section 10.7 Parties in Interest...................................... 29
Section 10.8 Counterparts............................................. 29
Section 10.9 Entire Agreement......................................... 29
Section 10.10 Amendments............................................... 30
Section 10.11 Severability............................................. 30
Section 10.12 Third Party Beneficiaries................................ 30
Section 10.13 Termination of Agreement................................. 30
Section 10.14 Construction............................................. 30
Section 10.15 Incorporation of Exhibits and Schedules.................. 30
Section 10.16 Specific Performance..................................... 31
SCHEDULE 2.1 - Existence, Good Standing, Authority...........................32
SCHEDULE 2.2 - Capital Stock.................................................33
SCHEDULE 2.3 - Subsidiaries and Investments..................................34
SCHEDULE 2.4 - Financial Statements..........................................35
SCHEDULE 2.5 - Absence of Changes............................................36
SCHEDULE 2.6 - Articles, By-laws, Books and Records..........................37
SCHEDULE 2.8 - Title to Properties; Encumbrances.............................38
iii
<PAGE>
SCHEDULE 2.9 - Real Property................................................. 39
SCHEDULE 2.10 - Leases....................................................... 40
SCHEDULE 2.11 - Material Contracts........................................... 41
SCHEDULE 2.12 - Restrictive Documents........................................ 42
SCHEDULE 2.13 - Litigation................................................... 43
SCHEDULE 2.14 - Taxes........................................................ 44
SCHEDULE 2.15 - Absence of Undisclosed Liabilities........................... 45
SCHEDULE 2.16 - Insurance.................................................... 46
SCHEDULE 2.17 - Intellectual Property........................................ 47
SCHEDULE 2.18 - Compliance with Laws......................................... 48
SCHEDULE 2.19 - Employee Benefit Plans....................................... 49
SCHEDULE 2.20 - Bank Accounts, Powers of Attorney and
Compensation of Employees.................................... 50
SCHEDULE 2.21 - Environmental................................................ 52
SCHEDULE 5.7 - Intra-Company Debt.............................................53
SCHEDULE 5.8 - Resignations and Election......................................54
EXHIBIT 1.3 - Option..........................................................55
EXHIBIT 1.4 - Note............................................................56
EXHIBIT 1.4A - Stock Pledge Agreement.........................................57
EXHIBIT 5.1 - Opinion of Company's Counsel................................... 58
EXHIBIT 5.10 - Fairness Opinion...............................................61
EXHIBIT 6.5 - Fife Resume ....................................................62
iv
<PAGE>
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of
July 3, 1996 by and among INTER-MOUNTAIN CAPITAL CORP., a Delaware corporation
("PURCHASER") which Purchaser is wholly owned by John Fife ("FIFE"), and UTAH
RESOURCES INTERNATIONAL, INC., a Utah corporation (the "COMPANY"). The
Purchaser and the Company are each referred to herein as a "Party" and are
collectively referred to herein as the "Parties."
R E C I T A L S:
A. The Company has five million (5,000,000) authorized shares of common,
$.10 par value per share stock (the "STOCK"), of which one million two hundred
ninety-one thousand one hundred ninety-eight (1,291,198) shares are issued;
B. The Company has issued options, warrants and instruments convertible
into stock for two hundred thousand (200,000) shares;
C. Contemporaneously with the Closing (as defined herein), the Company is
purchasing forty thousand five hundred fifty-two (40,552) shares of the Stock
from Anne Morgan and Victoria Morgan pursuant to the 1996 Settlement Agreement
(as defined herein);
D. Pursuant to the terms of a certain Letter of Intent between the
Company and the Purchaser, dated April 5, 1996 (the "LETTER OF INTENT"), as
amended by that Letter Agreement dated May 31, 1996, and as further amended by
that certain Settlement Agreement (as defined below), Purchaser wishes to
purchase from the Company and the Company wishes to sell to the Purchaser one
million two hundred seventy-five thousand nine hundred twelve (1,275,912) shares
of the Stock, which figure may be adjusted on the Closing Date so that Purchaser
is purchasing a fifty and one/half percent (50.5%) ownership interest (a
"MAJORITY INTEREST") in the Company (the "PURCHASED SHARES");
E. The Parties intend that, upon consummation of the purchase and sale of
the Purchased Shares pursuant to this Agreement, Purchaser shall own fifty and
one/half percent (50.5%) of the outstanding Stock of the Company;
F. The Parties, R. Dee Erickson, E. Jay Sheen, Lyle D. Hurd, Mark G.
Jones, Mark Technologies Corporation, a California corporation ("MTC "), Anne
Morgan, Victoria Morgan, Fife, and Robinson & Sheen, L.L.C. (together the
"SETTLING PARTIES") entered into a Settlement Agreement, dated as of June 26,
1996, regarding certain matters involving the Company including the transactions
contemplated by this Agreement (the "1996 SETTLEMENT AGREEMENT"); and
<PAGE>
G. The Parties, John H. Morgan, Jr., Daisy R. Morgan and Fife entered
into a Settlement Agreement, dated as of June 26, 1996, regarding certain
matters involving the Company including transactions contemplated by this
Agreement (the "1996 MORGAN SETTLEMENT AGREEMENT").
NOW, THEREFORE, IT IS AGREED:
CLAUSES
ARTICLE I
PURCHASE AND SALE OF SHARES
SECTION 1.1 CLOSING. The consummation of the transactions contemplated
hereby (the "CLOSING") shall take place at 10:00 A.M. at the offices of Giauque,
Crockett, Bendinger & Peterson, at 170 South Main Street, Suite 400, Salt Lake
City, Utah 84101, on July 3, 1996 (the "CLOSING DATE"), or at such other time
and date as the Parties shall designate in writing.
SECTION 1.2 SALE OF SHARES. On the Closing Date, subject to the terms and
conditions hereof, the Company shall sell, assign, transfer and deliver to
Purchaser, and Purchaser shall purchase from the Company the Purchased Shares.
The certificates representing such Purchased Shares shall be duly issued to the
Purchaser by the Company with all necessary transfer tax and other revenue
stamps (acquired at the Company's expense) affixed and canceled.
SECTION 1.3 OPTION. The Company shall issue an option to the Purchaser to
acquire an additional one hundred fifty thousand (150,000) shares of Stock or
more (the "OPTION SHARES"), at an exercise price of Three and 35/100 Dollars
($3.35) per share, payable in the same fashion as the Purchased Shares as
described in Section 1.4 (the "OPTION PRICE"), such that at all times the
Purchaser shall own or have the right to own a Majority Interest of the Company
(the "OPTION"). The Option may be exercised, on any one or more occasions, in
the event that:
(i) Outstanding options held as of the date of this Agreement to
purchase Stock of the Company which are held by others are exercised; or
(ii) The Reverse Split, as contemplated and defined in Section 8.5 of
this Agreement, occurs; or
(iii) Any new issuance of stock of the Company or the issuance of
instruments convertible into stock of the Company occurs.
The Option Price shall be payable in the same manner and over a similar
time period as set forth in Section 1.4. Notwithstanding anything to the
contrary contained herein, an Option
2
<PAGE>
exercised pursuant to Section 1.3(iii) shall be made at a purchase price equal
to the offering price of such new issuance and shall be payable in the same
manner and over a similar time period as set forth in Section 1.4. The Option
or any portion thereof shall be exercisable from time to time for a period of
ten (10) years. The Option shall be substantially in the form of EXHIBIT 1.3
attached hereto.
SECTION 1.4 PRICE. In full consideration for the purchase by Purchaser of
the Purchased Shares and the Option, Purchaser shall pay to the Company, Three
and 35/100 Dollars ($3.35) per share purchased, for an aggregate purchase price
of Four Million Two Hundred Seventy-Four Thousand Three Hundred Five and 20/100
Dollars ($4,274,305.20) (the "PURCHASE PRICE"), of which fifteen percent (15%)
of the Purchase Price or Six Hundred Forty-One Thousand One Hundred Forty-Five
and 78/100 Dollars ($641,145.78) shall be paid by the Purchaser to the Company
at the Closing. The balance of the Purchase Price shall be evidenced by
Purchaser's Promissory Note (the "NOTE"), in an amount equal to eighty-five
percent (85%) of the Purchase Price or Three Million Six Hundred Thirty-Three
Thousand One Hundred Fifty-Nine and 42/100 Dollars ($3,633,159.42) in a form
attached hereto as EXHIBIT 1.4. The Note shall bear interest at a rate equal to
the short-term applicable federal rate published by the Internal Revenue
Service, pursuant to Section 1274(d) of the Internal Revenue Code of 1986, as
amended, in effect at the time of the Closing, adjusted on each anniversary of
the Note to the applicable short term applicable federal rate in effect on such
anniversary date. Interest on the Note shall be paid currently in arrears,
which payments shall be due on each anniversary of the Note. Notwithstanding
anything to the contrary contained herein, at the Closing, Purchaser shall pay
to the Company an amount equal to the first year of interest due under the Note,
which amount shall be discounted to the present value (the "FIRST YEAR INTEREST
AMOUNT") at the Closing, thereafter interest shall be paid annually in arrears
on each anniversary of the Note, beginning with the second anniversary of the
Note. The principal and interest accrued under the Note shall be due and
payable August 1, 2001. The Note will be secured by the Purchased Shares, as
evidenced by a Stock Pledge Agreement in the form as set forth in EXHIBIT 1.4A.
Fife, the sole shareholder of Purchaser, shall guarantee twenty-five percent
(25%) of all amounts due under the Note. Purchaser further agrees and covenants
that all dividends or other distributions from the Company received on the
Purchased Shares and the proceeds to be received from any buy-backs of the
Purchased Shares by the Company shall be used exclusively to retire the Note
until such time as the Note and all interest accrued thereunder has been paid in
full.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company on behalf of itself, and its Affiliates, as hereinafter
defined, represents, warrants, covenants and agrees as follows as of the date
hereof and as of the Closing Date:
3
<PAGE>
SECTION 2.1 EXISTENCE, GOOD STANDING AND AUTHORITY. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Utah (the "COMPANY'S STATE OF INCORPORATION"). Schedule
2.1 sets forth a list of all entities which the Company directly or
indirectly, controls, is controlled by or with which the Company is under
common control (the "AFFILIATES"), a description of the ownership interest
held by the Company in such Affiliates and a list and description of the
properties held by such Affiliates and the respective jurisdiction where such
Affiliates transact business. The Company and its Affiliates have the power
to own their property and to carry on their business as it is now being
conducted. The Company is duly qualified to do business and is in good
standing in the State of Utah, which is the only jurisdiction in which the
character or location of the properties owned or leased by the Company or the
nature of the business conducted by the Company makes such qualification
necessary. The Company has full power and authority to make, execute,
deliver and perform this Agreement and all the related documents as
contemplated by this transaction (the "ANCILLARY DOCUMENTS"). The execution,
delivery and performance of this Agreement and the Ancillary Documents have
been duly authorized and approved by all required corporate action of the
Company and does not require any further authorization or consent of the
Company or its stockholders. This Agreement has been duly authorized,
executed and delivered by the Company and is the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, and each
of the Ancillary Documents has been duly authorized by the Company and upon
execution and delivery by the Company will be a legal, valid and binding
obligation of the Company enforceable in accordance with its terms.
(a) Except as set forth in Schedule 2.1, neither the execution and
delivery of this Agreement, any of the Ancillary Documents or the consummation
of any of the transactions contemplated hereby or thereby nor compliance with or
fulfillment of the terms, conditions and provisions hereof or thereof will:
(i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of
rights under, or result in the creation or imposition of any encumbrance on
the Purchased Shares or the Option Shares of any of the Company's assets
under (1) the Articles of Incorporation or By-Laws of the Company, (2) any
material Company agreement, (3) any other material note, instrument,
agreement, mortgage, lease, license, franchise, permit or other
authorization, right, restriction or obligation to which the Company, its
Affiliates, its Subsidiaries, as defined herein, or any of the Purchased
Shares or the Option Shares, or any of the Company's assets is subject or
by which the Company or any of its Affiliates or any of its Subsidiaries,
as defined herein, is bound, or (4) any Requirements of Laws, as defined
herein, affecting the Company, any of its Affiliates, any of its
Subsidiaries, as defined herein, the Purchased Shares, the Option Shares,
the assets of any Subsidiary, the assets of any of its Affiliates or any of
the Company's assets, which would have a material adverse impact on the
Company or any of its Subsidiaries or any of its Affiliates; or
4
<PAGE>
(ii) require the approval, consent, authorization or act of, or the
making by the Company of any declaration, filing or registration with, any
Person, as defined herein, which would have a material adverse impact on
the Company;
(b) For the purposes of this Agreement: (i) "SUBSIDIARY" means any entity
in which the Company indirectly or directly owns, of record, or beneficially,
any outstanding voting securities or other equity interest in any corporation,
partnership, joint venture or other entity; (ii) "REQUIREMENTS OF LAWS" means
any foreign, federal, state and local laws, statutes, regulations, rules, codes
or ordinances enacted, adopted issued or promulgated by any Governmental Body,
as defined herein (including, without limitation, those pertaining to
electrical, building, zoning, environmental and occupational safety and health
requirements) or common law; (iii) "PERSON" means any individual, corporation,
partnership, joint venture, limited liability company, association, joint stock
company, trust, unincorporated organization or Governmental Body; and
(iv) "GOVERNMENTAL BODY" means any foreign, federal, state, local or other
governmental authority or regulatory body.
SECTION 2.2 CAPITAL STOCK. The Company has an authorized capitalization
consisting of five million (5,000,000) shares of common stock, $.10 par value,
of which one million two hundred ninety-one thousand one hundred ninety-eight
(1,291,198) shares are issued and outstanding and three million seven hundred
eight thousand eight hundred two (3,708,802) shares are authorized but not
issued. All such outstanding Stock have been duly authorized and validly issued
and are fully paid and nonassessable. The parties acknowledge that Purchaser is
relying upon the representation set forth herein that one million two hundred
ninety-one thousand one hundred ninety-eight (1,291,198) shares of the Company
are outstanding and that forty thousand five hundred fifty-two shares of Stock
are being purchased contemporaneously herewith by the Company from Anne Morgan
and Victoria Morgan pursuant to the terms of the 1996 Settlement Agreement. To
the extent more than one million two hundred ninety-one thousand one hundred
ninety-eight (1,291,198) shares of the Company are outstanding, the Company will
immediately issue sufficient shares to Purchaser so that Purchaser retains a
Majority Interest. Such shares will be paid for in the same manner and at the
same price as set forth in Section 1.4 hereof. Except as set forth on
Schedule 2.2 and except for this Agreement, there are no outstanding options,
warrants, rights, calls, commitments, conversion rights, rights of exchange,
plans or other agreements of any character providing for the purchase, issuance
or sale of any shares of the capital stock of the Company, other than as
contemplated hereby. Except as specifically provided herein, the Purchased
Shares and the Option Shares are not subject to any agreement, voting trust,
proxy, understanding, judgment or decree, lien, encumbrance, restriction or
claim of any kind. The Purchaser hereby acknowledges that the Company and
certain directors and shareholders of the Company are parties to a Settlement
Agreement dated April 6, 1993 (the "1993 SETTLEMENT AGREEMENT"), a copy of which
is attached hereto as a part of Schedule 2.2, which 1993 Settlement Agreement
was entered into in connection with the settlement of a stockholders' derivative
lawsuit involving the Company. Purchaser agrees that until March 7, 1997 or
such earlier date upon which the 1993 Settlement Agreement may be terminated,
Purchaser shall vote the Purchased Shares it beneficially owns for each of the
directors appointed to the Company's Board of Directors in accordance with the
terms of the 1993 Settlement
5
<PAGE>
Agreement. Furthermore, pursuant to the terms of the 1996 Settlement Agreement,
the Settling Parties have agreed to use their best efforts immediately following
the Closing to petition the Court to terminate the 1993 Settlement Agreement.
SECTION 2.3 SUBSIDIARIES AND INVESTMENTS. Schedule 2.3 lists the
Company's subsidiaries (each a "SUBSIDIARY" and collectively the "SUBSIDIARIES")
and their respective jurisdictions of incorporation. Except as listed in
Schedule 2.3, neither the Company nor any Subsidiary owns, directly or
indirectly, any equity or debt securities of any Person, other than Affiliates
and accounts receivable from customers. Each Subsidiary is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all requisite power to own its property and to carry on
its business as now being conducted. Schedule 2.3 also lists the jurisdictions
in which each Subsidiary is qualified as a foreign corporation. Such
jurisdictions are the only jurisdictions in which the character or location of
the properties owned or leased by each Subsidiary, or the nature of the business
conducted by each Subsidiary, make such qualification necessary. All of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned, of record
and beneficially, by the Company or a Subsidiary, free and clear of any liens,
encumbrances, equities, options or claims whatsoever. No shares of the capital
stock of any Subsidiary are reserved for issuance and there are no outstanding
options, warrants, rights, subscriptions, claims of any character, voting
trusts, agreements, obligations, convertible or exchangeable securities, or
other commitments, contingent or otherwise, relating to any of the capital stock
of any Subsidiary.
SECTION 2.4 FINANCIAL STATEMENTS. Schedule 2.4 includes (i) the
consolidated (unissued) and consolidating balance sheets of the Company and its
Subsidiaries as of December 31, 1995 (the "MOST RECENT YEAR END") and each of
the four (4) preceding fiscal years, (ii) the related consolidated statements of
income, shareholders' equity and cash flow for the years then ended, all
certified by the Company's accountants (the "FINANCIAL STATEMENTS"). The
Financial Statements (other than those as of December 31, 1995), including the
footnotes thereto, except as indicated therein, were prepared in accordance with
generally accepted accounting principles ("GAAP"), consistently applied
throughout the periods indicated and are consistent with the books and records
of the Company. The Financial Statements (other than those as of December 31,
1995) are substantially complete and accurate in all material respects and
present fairly the financial condition and the results of the operations of the
Company and its Subsidiaries and the changes in their financial position for the
period indicated and of the Company and its Subsidiaries at the date and/or
period indicated. The Financial Statements (other than those as of December 31,
1995), as of their respective dates, contain no untrue statement of any material
fact nor omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
SECTION 2.5 ABSENCE OF CHANGES. Except as set forth in Schedule 2.5 and
except for the transactions described in the Split Off Agreement dated April 25,
1996, by and among the Company, Midwest Railroad Construction and Maintenance
Corporation, a Wyoming
6
<PAGE>
corporation ("MWRCM"), Robert D. Wolff and Judith J. Wolff (Robert D. Wolff and
Judith J. Wolff together are the "WOLFFS"), and except for the transactions
contemplated by the 1996 Settlement Agreement and 1996 Morgan Settlement
Agreement, since the Most Recent Year End, there has not been:
(a) any material adverse change in the financial condition, assets,
liabilities, business, backlog, operations or manner of conducting the business
of the Company, its Subsidiaries or its Affiliates, which has individually or in
the aggregate been materially adverse to the properties, assets, business or
prospects of the Company and its Subsidiaries and Affiliates considered as a
whole;
(b) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the properties or business of the Company,
any of its Subsidiaries or any of its Affiliates, considered as a whole;
(c) any declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock or assets of the Company, its
Subsidiaries or any of its Affiliates or any direct or indirect redemption,
purchase or other acquisition of any such stock;
(d) any issuance or sale, or agreement to issue or sell, any of the
capital stock of the Company or any of its Subsidiaries;
(e) any granting of options, warrants, or other rights calling for the
issuance of stock or other corporate securities of the Company or any of its
Subsidiaries;
(f) any disposition of or encumbrance or agreement to dispose of or to
encumber, or pledge or granting of a security interest in or agreement to pledge
an interest in, any of the business, property or assets of the Company or any of
its Subsidiaries or any of its Affiliates or increase or agreement to increase
any indebtedness of the Company or any of its Subsidiaries or any of its
Affiliates other than in the normal and ordinary course of business;
(g) any merger or consolidation involving the Company or any of its
Subsidiaries or any of its Affiliates or agreement to merge or consolidate with
any other corporation; or acquisition of any stock, business, property or assets
of any other person, firm, association, corporation or other business
organization, except in the normal and ordinary course of business and for use
in the business of the Company or its Subsidiaries as currently being conducted;
(h) any change, or any authorization of any change, in the Company's
Articles of Incorporation or by-laws;
(i) any settlement, cancellation, waiver, release or compromise of any
claim or right involving a payment of an amount in excess of Twenty-Five
Thousand Dollars ($25,000), except for claims or rights (i) arising and settled
in the ordinary course of business with customers (ii) which represent normal
types of adjustments made in the course of resolving routine
7
<PAGE>
customer disputes and (iii) where no payment has been made, directly or
indirectly, as between the Company or any of its Subsidiaries or any of its
Affiliates and any of their officers or directors or members of their families;
(j) (i) any change in the terms of employment of any officer or director
of the Company or any of its Subsidiaries or (ii) any salary increase or
authorization or payment of bonuses or other benefits payable or to become
payable under any bonus, insurance or other benefit plan to executives or other
employees, officers, or directors of the Company or any of its Subsidiaries or
any of its Affiliates earning more than Fifty Thousand Dollars ($50,000) a year
by the Company or any of its Subsidiaries;
(k) the adoption, modification or termination of any bonus, profit
sharing, incentive compensation, pension, retirement, insurance, severance or
other plan, contract or commitment with respect to the Company and its
Subsidiaries;
(l) any loan or advance to any person or any guaranty of any indebtedness
of any other Person except (i) a normal travel advance or other reasonable
expense advance to an officer or employee of the Company or any of its
Subsidiaries or (ii) pursuant to normal trade terms extended to customers;
(m) any cancellation by the Company or any of its Subsidiaries, without
payment in full, of any notes, loans, or other obligations receivable from any
officer or director of the Company or of any of its Subsidiaries or any member
of their families, or from any corporation, partnership, or other entity in
which any officer or director of the Company or any of its Subsidiaries, or any
member of their families, has any direct or indirect interest;
(n) any material transaction, occurrence, action or failure to act by the
Company or any of its Subsidiaries, considered as a whole, other than in the
ordinary course of business, except the transactions contemplated by this
Agreement;
(o) any sale or granting to any party or parties of any license,
franchise, option or other right of any nature whatsoever to sell, distribute,
or otherwise deal in or with the merchandise of the Company and its Subsidiaries
or any license or sublicense to use any Intellectual Property (as defined in
Section 2.17 below) of the Company or any of its Subsidiaries, except in the
ordinary course of business;
(p) any change in the accounting methods or practices of the Company or
any of its Subsidiaries or any change in depreciation or amortization policies
or rates theretofore adopted by the Company or any of its Subsidiaries; or
(q) any agreement or commitment by the Company or any of its Subsidiaries
or any of its Affiliates to do or take any of the actions referred to in any of
the foregoing paragraphs of this Section 2.5.
8
<PAGE>
SECTION 2.6 ARTICLES, BY-LAWS, BOOKS AND RECORDS. Copies of the Company's
and its Subsidiaries' Articles of Incorporation (certified by the Utah Secretary
of State and/or the appropriate state of incorporation) and the By-laws
(certified by the Secretary of the Company and the applicable Subsidiary) which
have been delivered to Purchaser are true and complete. The respective minute
books of the Company and its Subsidiaries, as previously made available to the
Purchaser and its representatives, contain accurate records of all meetings of
and corporate actions or written consents by the respective stockholders and
Boards of Directors of the Company and each of its Subsidiaries. Except as set
forth in Schedule 2.6, the Company and its Subsidiaries do not have any of their
respective records, systems, controls, data or information recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the Company and its
Subsidiaries.
SECTION 2.7 COPIES OF DOCUMENTS. The Company has caused to be made
available for inspection and copying by the Purchaser herein and its advisers,
true, complete and correct copies of all documents referred to herein or in any
Schedule or any Exhibit furnished by the Company to the Purchaser and all
documents and materials within the Company's possession.
SECTION 2.8 TITLE TO PROPERTIES; ENCUMBRANCES. To the best of the
Company's knowledge, and except as set forth in Schedule 2.8 and except for
properties and assets reflected in the Financial Statements or acquired since
the Most Recent Year End which have been sold or otherwise disposed of in the
ordinary course of business, the Company and each of its Subsidiaries and
Affiliates has good, valid and marketable title to (a) all its properties and
assets (real and personal, tangible and intangible), including, without
limitation, all the properties and assets reflected in the Financial Statements,
except as indicated in the notes thereto, and (b) all the properties and assets
purchased by the Company and each Subsidiary and each Affiliate since the Most
Recent Year End; in each case subject to no liens, claims, encumbrances, charges
or other restrictions of any kind or character other than those which are
currently of record.
SECTION 2.9 REAL PROPERTY. Schedule 2.9 is an accurate and complete list
and description of all real property (the "REAL PROPERTY") owned in whole or in
part by the Company or any of its Subsidiaries and includes the name of the
record title holder thereof and a list of all indebtedness secured by a lien,
mortgage or deed of trust thereon. Each of the Company and its Subsidiaries has
good and marketable title in fee simple to all the Real Property, free and clear
of all encumbrances, liens, charges or other restrictions of any kind or
character, except as set forth in Schedule 2.9. Except as set forth in
Schedule 2.9, no condemnation proceeding is pending or, to the best knowledge,
information and belief of the Company, threatened which would preclude or impair
the use of any of the Real Property by the Company or such Subsidiary for the
purposes for which it is currently used. The Real Property owned by the Company
is comprised of approximately three hundred ninety (390) or more acres which
acreage is zoned for a residential density of R110 or higher.
9
<PAGE>
SECTION 2.10 LEASES. Schedule 2.10 is an accurate and complete list and
description of the terms of all leases to which the Company or any Subsidiary is
a party (as lessee or lessor). Each lease listed on Schedule 2.10 is in full
force and effect; all rents and additional rents due to date on each such lease
have been paid; in each case, the lessee has been in peaceable possession since
the commencement of the original term of such lease and is not in default
thereunder and no waiver, indulgence or postponement of the lessee's obligations
thereunder has been granted by the lessor; and there exists no event of default
or event, occurrence, condition or act (including the purchase of the Purchased
Shares or the granting of the option for the Option Shares hereunder) which,
with the giving of notice, the lapse of time or the happening of any further
event or condition, would become a default under such lease. Neither the
Company nor any Subsidiary has violated any of the terms or conditions under any
such lease in any material respect, and, to the best knowledge, information and
belief of the Company, all of the covenants to be performed by any other party
under any such lease have been fully performed.
SECTION 2.11 MATERIAL CONTRACTS. Except as set forth in Schedule 2.11,
neither the Company nor any of its Subsidiaries has or is bound by (a) any
agreement, contract or commitment relating to the employment of any person by
the Company or any Subsidiary, or any bonus, deferred compensation, pension,
profit sharing, stock option, employee stock purchase, retirement or employee
benefit plan (b) any agreement, indenture or other instrument which restricts
payment of dividends or any other distribution in respect of its capital stock,
(c) any agreement, contract or commitment relating to capital expenditures,
(d) any loan or advance to, or investment in, any other Person or any agreement,
contract or commitment relating to the making of any such loan, advance, or
investment, (e) any guarantee or other contingent liability in respect of any
indebtedness or obligation of any other Person (other than the endorsement of
negotiable instruments for collection in the ordinary course of business),
(f) any management service, consulting or any other similar type contract,
(g) any agreement, contract or commitment limiting the freedom of the Company or
any Subsidiary to engage in any line of business or to compete with any other
Person, (h) any agreement, contract or commitment not entered into in the
ordinary course of business which is not cancelable without penalty within
thirty (30) days or (i) any agreement, contract or commitment which might
reasonably be expected to have a potential adverse impact on the business or
operations of the Company or any of its Subsidiaries; and with respect to items
(a)-(i) above which involves Twenty-Five Thousand Dollars ($25,000) or more.
Each contract or agreement set forth in Schedule 2.11 is in full force and
effect and there exists no default or event of default or event, occurrence,
condition or act (including the purchase of the Purchased Shares hereunder)
which, with the giving of notice, the lapse of time or the happening of any
other event or condition, would become a default or event of default thereunder.
Neither the Company nor any such Subsidiary has violated any of the terms or
conditions of any contract or agreement set forth in Schedule 2.11 in any
material respect, and, to the best knowledge, information and belief of the
Company, all of the covenants to be performed by any other party thereto have
been fully performed. Contracts or agreements made in the ordinary course of
business involving payments of less than Twenty-Five Thousand Dollars ($25,000),
in the aggregate, in any year shall be deemed not to be material for purposes of
this Section 2.11.
10
<PAGE>
SECTION 2.12 RESTRICTIVE DOCUMENTS. To the best of the Company's
knowledge and except as set forth in Schedule 2.12, neither the Company, nor any
of its Subsidiaries, is subject to, or a party to any articles of incorporation,
bylaw, mortgage, lien, lease, license, permit, agreement, contract, instrument,
law, rule, ordinance, regulation, order, judgment or decree, or any other
restriction of any kind or character, which materially and adversely affects the
business practices, operations or condition of the Company or any of its
Subsidiaries or any of their assets or property, or which would prevent
consummation of the transactions contemplated by this Agreement, compliance by
the Company with the terms, conditions and provisions hereof or the continued
operation of the Company's or any Subsidiary's business after the date hereof or
the Closing Date on substantially the same basis as heretofore operated or which
would restrict the ability of the Company or any Subsidiary to acquire any
property or conduct business in any area. Except as set forth in Schedule 2.12,
no filing or registration with, or authorization, consent or approval of, any
public body or authority is necessary for the consummation of the transactions
contemplated by the Agreement.
SECTION 2.13 LITIGATION. Except as set forth in Schedule 2.13 and in the
1996 Settlement Agreement, and the 1996 Morgan Settlement Agreement, there is no
action, suit, proceeding at law or in equity by any person or entity, or any
arbitration or any administrative or other proceeding by or before (or to the
best knowledge, information and belief of the Company any investigation by) any
governmental or other instrumentality or agency, pending or, against or
affecting the Company or any of its Subsidiaries, or any of their properties or
rights which could materially and adversely affect the right or ability of the
Company or any of its Subsidiaries to carry on its business as now conducted, or
which could materially and adversely affect the condition, whether financial or
otherwise, or properties of the Company or any of its Subsidiaries. Except as
set forth in Schedule 2.13 and in the 1996 Settlement Agreement, and in the 1996
Morgan Settlement Agreement, neither the Company nor any of its Subsidiaries is
subject to any judgment, order or decree entered in any lawsuit or proceeding
which may have a material adverse affect on any of its operations, business
practices or on its ability to acquire any property or conduct business in any
area.
SECTION 2.14 TAXES. Except as set forth on Schedule 2.14, the Company has
filed or caused to be filed, within the times and within the manner prescribed
by law, all federal, state, local and foreign tax returns and tax reports which
are required to be filed by, or with respect to, the Company or any of its
Subsidiaries. Such returns and reports reflect accurately all liability for
taxes of the Company and all of its Subsidiaries for the periods covered
thereby. All federal, state, local and foreign income, profits, franchise,
sales, use, occupancy, excise and other taxes and assessments (including
interest and penalties) payable by, or due from, the Company or any of its
Subsidiaries have been fully paid or adequately disclosed and fully provided for
in the books of account and Financial Statements of the Company and its
Subsidiaries. The federal income tax liability of the Company and its
Subsidiaries has been finally determined for all periods to and including the
Most Recent Fiscal Year End. No examination of any tax return of the Company or
any of its Subsidiaries is currently in progress. There are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any tax return of the Company or any of its Subsidiaries.
11
<PAGE>
SECTION 2.15 ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Company nor
any of its Subsidiaries has any outstanding claims, liabilities or indebtedness,
contingent or otherwise, except as set forth in the Financial Statements or
referred to in the footnotes thereto, other than liabilities incurred subsequent
to the Most Recent Year End in the ordinary course of business not involving
borrowings by the Company or any Subsidiary. Except as set forth on
Schedule 2.15, neither the Company nor any of its Subsidiaries is in default in
respect of the terms or conditions of any indebtedness. Neither the Company nor
any Subsidiary is directly or indirectly liable, by guaranty or otherwise, upon
or with respect to any debt, dividend or obligation of any person, corporation,
association, partnership or other entity.
SECTION 2.16 INSURANCE. Schedule 2.16 contains an accurate and complete
list and brief description (including nature of coverage, limits, and the loss
experiences for the most recent three (3) years with respect to each type of
coverage) of all insurance policies which the Company and its Subsidiaries
maintain with respect to their businesses, properties or employees. Each such
policy is in full force and effect free from any right of termination on the
part of the insurance carriers. Seller has complied in all material respects
with each of such insurance policies and has not failed to give any notice or
present any claim thereunder in a due and timely manner. Such policies, with
respect to their amounts and types of coverage, are adequate to insure fully
against risks to which the Company, its Subsidiaries and their property and
assets are normally exposed in the operation of their respective businesses.
Since the Most Recent Year End, there has not been any material adverse change
in the Company's or any Subsidiary's relationship with its insurers or in the
premiums payable pursuant to such policies and Company shall keep or cause such
insurance or comparable insurance to be kept in full force and effect through
the Closing Date.
SECTION 2.17 INTELLECTUAL PROPERTY. Schedule 2.17 contains an accurate
and complete list of all domestic and foreign letters patent, patents, patent
applications, patent licenses, technology, software licenses and know-how
licenses, trade secrets, trade names, trademarks, copyrights, unpatented
inventions, service marks, trademark registrations and applications, service
mark registrations and applications and copyright registrations and applications
(collectively, "INTELLECTUAL PROPERTY") owned or used by the Company and its
Subsidiaries in the operation of their respective businesses. Unless otherwise
set forth on Schedule 2.17, the Company and its Subsidiaries collectively own
the entire right, title and interest in and to such Intellectual Property
(including, without limitation, the exclusive right to use and license the
same), and each item constituting part of such Intellectual Property has been,
to the extent set forth on Schedule 2.17, duly registered with, filed in or
issued by, as the case may be, the United States Patent and Trademark Office or
such other government entities, domestic or foreign, as are set forth on
Schedule 2.17 and such registrations, filings and issuances remain in full force
and effect. To the best knowledge, information and belief of the Company,
except as set forth on such Schedule 2.17, there are no pending or threatened
proceedings or litigation or other adverse claims affecting or with respect to
such Intellectual Property. Schedule 2.17 lists all notices or claims currently
pending or received by the Company or any of its Subsidiaries during the past
two years which claim infringement by the Company or such Subsidiary of any
Intellectual Property. Except as set forth in Schedule 2.17, there is, to the
12
<PAGE>
best knowledge, information and belief of the Company, no reasonable basis upon
which a claim may be asserted against the Company or any of its Subsidiaries for
infringement of any Intellectual Property. To the best knowledge, information
and belief of the Company, except as set forth on Schedule 2.17, no Person is
infringing any of the Intellectual Property used by the Company and its
Subsidiaries in the operation of their respective businesses.
SECTION 2.18 COMPLIANCE WITH LAWS. To the best knowledge of the Company,
the Company and its Subsidiaries have each complied in all respects with all
laws, regulations and orders applicable to them or their businesses and have
obtained all governmental permits or licenses (if any) required by their
businesses, where the failure to comply with such law, regulation or order or
the failure to obtain such permit or license would have a material adverse
effect on the business of the Company and its Subsidiaries, considered as a
whole, and the present uses of the properties of the Company and its
Subsidiaries do not violate in any respect any law, regulation or order except
such violations which would not have a material adverse effect on the business
of the Company and its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received any notice or warnings from any governmental authority
or other party with respect to any failure or alleged failure of the Company or
any of its Subsidiaries to comply with any material law, regulation or order,
and, to the best knowledge of the Company and its Subsidiaries, no such notice
or warning is proposed or threatened. In addition, and not in limitation of the
foregoing, the Company and each of its Subsidiaries has obtained all permits,
certificates, licenses, registrations, approvals and other authorizations
required under all applicable environmental, safety and health laws, ordinances,
orders and regulations necessary for the lawful conduct of its business as it is
currently conducted, and where the failure to obtain such permit, certificate,
license, registration, approval, or other authorization would have a material
adverse effect on the business of the Company and its Subsidiaries, considered
as a whole. Each of such environmental, health and safety permits,
certificates, licenses, registrations, approvals and other authorizations of the
Company and its Subsidiaries are in full force and effect. The Company and each
of its Subsidiaries is fully in compliance with all material requirements or
schedules of compliance of all such environmental, health and safety permits,
certificates, licenses, registrations, approvals and other authorizations held
by them. Except as set forth on Schedule 2.18, no citation or other notice has
been received by the Company or any of its Subsidiaries from, and, to the
knowledge of the Company and its Subsidiaries, no such investigation or review
is pending or has been threatened by, any federal, state or local government
entity with respect to any applicable violation pertaining to the business of
the Company or its Subsidiaries, or with respect to any applicable environmental
law, ordinance, regulation, order, policy or guidelines, or any alleged failure
to have all environmental, health and safety permits, certificates, licenses,
registrations, approvals, variances, consent orders and other authorizations
required in connection with the conduct of such businesses.
SECTION 2.19 EMPLOYEE BENEFIT PLANS.
(a) LIST OF PLANS. Schedule 2.19 is an accurate and complete list of all
employee benefit plans ("EMPLOYEE BENEFIT PLANS") within the meaning of
Section 3(3) of the Employee
13
<PAGE>
Retirement Income Security Act of 1974, as amended ("ERISA"), whether or not any
such Employee Benefit Plans are otherwise exempt from the provisions of ERISA,
established, maintained or contributed to by the Company or any of its
Subsidiaries (including, for this purpose and for the purpose of all of the
representations in this Section 2.19, all employers (whether or not
incorporated) which by reason of common control are treated together with the
Company as a single employer within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended (the "CODE") since September 2, 1974).
(b) STATUS OF PLANS. Neither the Company nor any of its Subsidiaries
maintains or contributes to any such Employee Benefit Plan subject to ERISA
which is not in substantial compliance with ERISA, or which has incurred any
accumulated funding deficiency within the meaning of Sections 412 or 418B of
ERISA, or which has applied for or obtained a waiver from the Internal Revenue
Service of any minimum funding requirement under Section 412 of the Code.
Neither the Company nor any of its Subsidiaries has incurred any liability to
the Pension Benefit Guaranty Corporation ("PBGC") in connection with any
Employee Benefit Plan covering any employees of the Company or any of its
Subsidiaries or ceased operations at any facility or withdrawn from any such
Plan in a manner which could subject it to liability under Sections 4062(f),
4063 or 4064 of ERISA, and knows of no facts or circumstances which might give
rise to any liability of the Company or any of its Subsidiaries to the PBGC
under Title IV of ERISA which could reasonably be anticipated to result in any
claims being made against Purchaser by the PBGC. Neither the Company nor any of
its Subsidiaries has incurred any withdrawal liability (including any contingent
or secondary withdrawal liability) within the meaning of Sections 4201 and 4202
of ERISA, to any Employee Benefit Plan which is a Multiemployer Plan (as defined
in Section 4001 of ERISA), and no event has occurred, and there exists no
condition or set of circumstances, which presents a material risk of the
occurrence of any withdrawal from or the partition, termination, reorganization
or insolvency of any Multiemployer Plan which could result in any liability to a
Multiemployer Plan.
(c) CONTRIBUTIONS. Full payment has been made of all amounts which the
Company or any of its Subsidiaries is required, under applicable law or under
any Employee Benefit Plan or any agreement relating to any Employee Benefit Plan
to which the Company or any of its Subsidiaries is a party, to have paid as
contributions thereto as of the last day of the most recent fiscal year of such
Employee Benefit Plan ended prior to the date hereof. The Company has made
adequate provision for reserves to meet contributions that have not been made
because they are not yet due under the terms of any Employee Benefit Plan or
related agreements. Benefits under all Employee Benefit Plans are as
represented and have not been increased subsequent to the date as of which
documents have been provided.
(d) TAX QUALIFICATION. Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service and nothing has occurred since the
date of the last such determination which resulted or is likely to result in the
revocation of such determination.
14
<PAGE>
(e) TRANSACTIONS. No Reportable Event (as defined in Section 4043 of
ERISA) for which the 30-day notice requirement has not been waived by the PBGC
has occurred with respect to any Employee Benefit Plan and neither the Company
nor any of its Subsidiaries has engaged in any transaction with respect to the
Employee Benefit Plans which would subject it to a tax, penalty or liability for
prohibited transactions under ERISA or the Code nor has any of their respective
directors, officers or employees to the extent they or any of them are
fiduciaries with respect to such plans, breached any of their responsibilities
or obligations imposed upon fiduciaries under Title I of ERISA or would result
in any claim being made under or by or on behalf of any such plans by any party
with standing to make such claim.
(f) OTHER PLANS. Neither the Company nor any of its Subsidiaries
presently maintains any employee benefit plans or any other foreign pension,
welfare or retirement benefit plans other than those listed in Schedule 2.19.
(g) DOCUMENTS. The Company has delivered or caused to be delivered to the
Purchaser and its counsel true and complete copies of (i) all Employee Benefit
Plans as in effect, together with all amendments thereto which will become
effective at a later date, as well as the latest Internal Revenue Service
Determination Letter obtained with respect to any such Employee Benefit Plan
qualified under Section 401 or 501 of the Code and (ii) Form 5500 for the most
recent completed fiscal year for each Employee Benefit Plan required to file
such form.
SECTION 2.20 BANK ACCOUNTS, POWERS OF ATTORNEY AND COMPENSATION OF
EMPLOYEES. Schedule 2.20 is an accurate and complete list showing (a) the name
and address of each bank in which the Company or any of its Subsidiaries has an
account or safe-deposit box, the number of any such account or any such box and
the names of all persons authorized to draw thereon or to have access thereto
and the balances of each such account as of the date hereof, (b) the names of
all persons, if any, holding powers of attorney from the Company or any of its
Subsidiaries and a summary statement of the terms thereof and (c) the names of
all persons whose compensation from the Company or any of its Subsidiaries for
the fiscal year ended on the Most Recent Fiscal Year End exceeded an annualized
rate of Fifty Thousand Dollars ($50,000), together with a statement of the full
amount paid or payable to each such person for services rendered during such
fiscal year.
SECTION 2.21 ENVIRONMENTAL.
(a) To the best knowledge of the Company, except as set forth in
Schedule 2.21, the Company and each of its Subsidiaries have duly complied with,
and the Real Property is in compliance with, the provisions of all federal,
state and local environmental, health and safety laws, codes and ordinances and
all rules and regulations promulgated thereunder. Except as set forth in
Schedule 2.21, the Company and each of its Subsidiaries have not received any
notice of, and neither knows of nor suspects, any fact(s) which might constitute
violation(s) of any federal, state or local environmental, health or safety
laws, codes or ordinances, and any rules or regulations promulgated thereunder,
which relate to the history, use, ownership or occupancy
15
<PAGE>
of the Real Property, and is not in violation of any covenants, conditions,
easements, rights-of-way or restrictions affecting the Real Property or any
rights appurtenant thereto.
(b) To the best knowledge of the Company, except as set forth in
Schedule 2.21, there has been no emission, spill, dumping, storage, impoundment,
release or discharge into or upon (i) the air, (ii) soils, or any improvements
located thereon, (iii) surface water or groundwater, or (iv) the sewer, septic
system or solid or liquid waste treatment storage or disposal system servicing
the Real Property, of any toxic or hazardous wastes or "hazardous substances"
(as such term is defined at 42 U.S.C. Section 9601(ii) and Sections 1003.14 and
1003.15 of the Utah Environmental Protection Act, [Utah Reference], but shall
include petroleum crude oil and any fraction thereof), or petroleum products or
wastes at or from the Real Property (any of which is hereafter referred to as a
"HAZARDOUS DISCHARGE"), and the Real Property including the groundwater under
the Real Property, are free of all such toxic or hazardous substances or wastes
whether discharged from the Property or from any other property.
(c) To the best knowledge of the Company, except as set forth in
Schedule 2.21, there has been no complaint, order, directive, claim, citation,
request for information or notice by any governmental authority or any other
person or entity with respect to (i) air emission, (ii) spills, releases or
discharges to soils or any improvements located thereon, surface water,
groundwater or the sewer, septic system or waste treatment, storage or disposal
systems servicing the Real Property, (iii) noise emissions, (iv) solid or liquid
waste disposal whether hazardous or non-hazardous, (v) the use, generation,
storage, transportation or disposal of toxic or hazardous substances or wastes,
or (vi) other environmental, health or safety matters affecting the Company or
any of its Subsidiaries, the Real Property, any improvements located thereon or
the business therein conducted (any of which is hereafter referred to as an
"ENVIRONMENTAL COMPLAINT").
(d) To the best knowledge of the Company, the Company has provided
Purchaser with true, accurate and complete information pertaining to the
environmental history of the Real Property and there are no asbestos-containing
materials, PCB-containing materials (including, but not limited to, power
transformers or fluorescent light ballasts or fixtures) or underground storage
tanks located at the Real Property.
(e) The Company and each Subsidiary has been issued, and shall maintain
until the Closing Date, all required federal, state and local permits, licenses,
certificates and approvals relating to (i) air emission, (ii) discharges to
surface water or groundwater, (iii) noise emissions, (iv) solid or liquid waste
disposal, (v) the use, generation, storage, transportation or disposal of
"special," toxic or hazardous substances or wastes (intended hereby and
hereafter to include any and all such materials listed in any federal, state or
local law, code or ordinance and all rules and regulations promulgated
thereunder, as hazardous or potentially hazardous), or (vi) other environmental,
health or safety matters. An accurate and complete list of all such permits,
licenses, certificates or approvals is set forth on Schedule 2.21.
16
<PAGE>
SECTION 2.22 BROKER'S OR FINDER'S FEES. No agent, broker, person or firm
acting on behalf of the Company is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated hereby for which
the Purchaser could become obligated.
SECTION 2.23 Intentionally Omitted.
SECTION 2.24 DISCLOSURE. To the best of the Company's knowledge, neither
this Agreement nor any Schedule, Exhibit or certificate delivered in accordance
with the terms hereof or any document or statement in writing which has been
supplied by or on behalf of the Company's or any of its Subsidiaries', directors
or officers, in connection with the transactions contemplated hereby, contains
any untrue statement of a material fact, or omits any statement of a material
fact necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to the Company which materially and
adversely affects the business, prospects or financial condition of the Company
or any of its Subsidiaries or their respective properties or assets, which has
not been set forth in this Agreement or in the Schedules, Exhibits or
certificates or statements in writing furnished in connection with the
transactions contemplated by this Agreement.
SECTION 2.25 REPORTS. The Company has previously delivered to the
Purchaser true and complete copies of its (a) Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, and Immediate Reports on Form 8-K filed by the
Company or any of its Subsidiaries with the Securities and Exchange Commission
(the "SEC") from January 1, 1993, until the date hereof, (b) proxy and
information statements relating to all meetings of its stockholders (whether
annual or special) and actions by written consent in lieu of a stockholders'
meeting from January 1, 1993 until the date hereof, and (c) all other reports or
registration statements filed by the Company with the SEC from January 1, 1993
until the date hereof (collectively, the "COMPANY SEC REPORTS"). The Company
SEC Reports did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company has not filed SEC Form 10-Q's for the periods
ending March 31, 1995, June 30, 1995, September 30, 1995, and March 31, 1996, or
a Form 10-K for the fiscal year ending December 31, 1995.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER
The Purchaser represents, warrants, covenants and agrees as follows as of
the date hereof and as of the Closing Date:
17
<PAGE>
SECTION 3.1 EXISTENCE AND GOOD STANDING OF PURCHASER/CORPORATE AUTHORITY.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Purchaser has the power to own its
property and to carry on its business as it is now being conducted. The
Purchaser is duly qualified to do business and is in good standing in the States
of Delaware and Utah, which are the only jurisdictions in which the character or
location of the properties owned or leased by the Purchaser or the nature of the
business conducted by the Purchaser makes such qualification necessary. The
Purchaser has full power and authority to make, execute, deliver and perform
this Agreement and all the related documents as contemplated by this
transaction. The execution, delivery and performance of this Agreement and the
Ancillary Documents have been duly authorized and approved by all required
corporate action of Purchaser, and do not require any further authorization or
consent of the Purchaser. This Agreement has been duly authorized, executed and
delivered by the Purchaser and is the legal, valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, and each of the Ancillary
Documents has been duly authorized by the Purchaser and upon execution and
delivery by the Purchaser will be a legal, valid and binding obligation of the
Purchaser enforceable in accordance with its terms. The issuance and delivery
of the Note has been approved by all required corporate action of the Purchaser.
Neither the execution and delivery of this Agreement, and any of the
Ancillary Documents or the consummation of any of the transactions contemplated
hereby or thereby nor compliance with or fulfillment of the terms, conditions
and provisions hereof or thereof will:
(i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of
rights under, or result in the creation or imposition of any encumbrances
on any of the Purchaser's assets under (1) the Articles of Incorporation or
By-Laws of the Purchaser, (2) any agreement, (3) any other material note,
instrument, agreement, mortgage, lease, license, franchise, permit or other
authorization, right, restriction or obligation to which the Purchaser or
any of the Purchaser's assets is subject or by which the Purchaser is
bound, or (4) any Requirements of Law affecting the Purchaser or any of the
Purchaser's assets, which would have a material adverse impact on the
Purchaser; or
(ii) require the approval, consent, authorization or act of, or the
making by the Purchaser of any declaration, filing or registration with any
Person, which would have a material, adverse impact on the Purchaser.
SECTION 3.2 BROKER'S OR FINDER'S FEES. No agent, broker, person or firm
acting on behalf of the Purchaser is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated hereby for which
the Company could become obligated.
18
<PAGE>
SECTION 3.3 SETTLEMENT AGREEMENT. Pursuant to the terms of the 1993
Settlement Agreement, dated April 6, 1993, a copy of which is attached hereto as
a part of Schedule 2.2, associated with the settlement of a stockholders'
derivative lawsuit, the Purchaser hereby agrees that until March 7, 1997 or such
earlier date upon which the 1993 Settlement Agreement may be terminated,
Purchaser shall vote the Purchased Shares it beneficially owns, for each of the
directors appointed to the Company's Board of Directors in accordance with the
terms of the 1993 Settlement Agreement. Purchaser acknowledges and agrees that
the 1996 Settlement Agreement requires Purchaser to use its best efforts to
petition the appropriate court for purposes of terminating the 1993 Settlement
Agreement.
Section 3.4 SEC FILINGS. Purchaser acknowledges that the Company has not
filed SEC Form 10-Q's for the periods ending March 31, 1995, June 30, 1995,
September 30, 1995, and March 31, 1996, or a Form 10-K for the fiscal year
ending December 31, 1995.
ARTICLE IV
CONDUCT OF BUSINESS; REVIEW
SECTION 4.1 GENERAL. Each of the parties hereto will use its best efforts
to take all action and to do all things necessary, proper, or advisable to
consummate and make effective the transactions contemplated by this Agreement
(including satisfying the closing conditions set forth below).
SECTION 4.2 NOTICES AND CONSENTS. The Company and its Subsidiaries will
give any notices to third parties, and will use its best efforts to obtain any
third party consents, that the Purchaser may request in connection with the
matters pertaining to the Company and its Subsidiaries disclosed or required to
be disclosed in the Schedules hereto. Each of the Parties will take any
additional action that may be necessary, proper, or advisable in connection with
any other notices to, filings with, and authorizations, consents, and approvals
of governments, governmental agencies, and third parties that he, she or it may
be required to give, make, or obtain.
SECTION 4.3 CONDUCT OF BUSINESS OF THE COMPANY. During the period from
the date hereof to the Closing Date, the Company and each of its Subsidiaries
shall conduct their respective operations only according to their ordinary and
usual course of business and to use their best efforts to preserve intact their
respective business organizations, keep available the services of their officers
and employees, and maintain satisfactory relationships with licensors,
suppliers, distributors, clients and others having business relationships with
them. Notwithstanding the immediately preceding sentence, pending the Closing
Date and except as may be first approved by the Purchaser or as is otherwise
permitted or required by this Agreement, (a) the Company and each of its
Subsidiaries shall maintain their respective Articles of Incorporation and
By-laws, in their form on the date hereof, (b) the Company shall maintain the
compensation payable or to become payable by the Company and each of its
Subsidiaries to
19
<PAGE>
any officer, employee or agent being paid Fifty Thousand Dollars ($50,000) per
year or more on the Most Recent Fiscal Year End, at their levels on the date of
this Agreement, (c) the Company and each of its Subsidiaries shall refrain from
making any bonus, pension, retirement or insurance payment or arrangement to or
with any such persons except those that may have already been accrued, (d) the
Company and each of its Subsidiaries shall refrain from entering into any
contract or commitment except contracts in the ordinary course of business,
(e) the Company and each of its Subsidiaries shall refrain from making any
change affecting any bank, safe-deposit or power of attorney arrangements of the
Company or any such Subsidiary, (f) the Company shall not permit any changes in
its or any Subsidiaries Capital structure, issue any additional shares or sell
any additional shares of its capital stock, nor instruments convertible into
shares, and (g) the Company shall consult with Purchaser regarding all material
litigation involving the Company and/or its directors and officers. During the
period from the date hereof to the Closing Date, the Company shall confer on a
regular and frequent basis with one or more designated representatives of the
Purchaser to report material operational matters and to report the general
status of ongoing operations. The Company and each of its Subsidiaries shall
notify Purchaser of any unexpected emergency or other change in the normal
course of its business or in the operation of its properties and of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), adjudicatory proceedings, budget
meetings or submissions involving any material property of the Company and each
of its Subsidiaries, and shall keep Purchaser fully informed of such events and
permit its representatives prompt access to all materials prepared in connection
therewith; provided, however, that no such notice shall be deemed to amend or
supplement any of the representations or warranties of the Company under this
Agreement or any Schedule or any Exhibit hereto.
SECTION 4.4 EXCLUSIVE DEALING. During the period from the date hereof to
the Closing Date, the Company shall refrain from taking any action, and shall
cause the directors, officers and principal shareholders to refrain from taking
any action to, directly or indirectly, encourage, initiate or engage in
discussions or negotiations with, or provide any information to, any
corporation, partnership, person, or other entity or group, other than the
Purchaser, concerning any purchase of the Stock or any merger, sale of
substantially all of the assets, or similar transaction or business combination
involving the Company. The Company will notify the Purchaser immediately if any
Person makes any proposal, offer, inquiry or contact with respect to any of the
foregoing.
SECTION 4.5 REVIEW OF THE COMPANY. The Company and each of its
Subsidiaries shall permit the Purchaser and its representatives to have, after
the date hereof, full access to the premises, assets, books and records of the
Company and its Subsidiaries and shall cause the officers of the Company and
each of its Subsidiaries to furnish the Purchaser with such financial and
operating data and other information with respect to the business and properties
of the Company and its Subsidiaries as the Purchaser shall from time to time
reasonably request. In the event of termination of this Agreement, the
Purchaser shall keep confidential any material information obtained from the
Company or any Subsidiaries concerning the Company's and its Subsidiaries'
respective properties, operations and business (unless readily ascertainable
from public or published information or trade sources) until the same ceases to
be material (or
20
<PAGE>
becomes so ascertainable) and shall return to the Company and its Subsidiaries
all copies of any schedules, statements, documents or other written information
obtained in connection therewith.
ARTICLE V
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to purchase the Purchased Shares on the
Closing Date is subject to the following conditions:
SECTION 5.1 OPINION OF COMPANY'S COUNSEL. The Company shall have
furnished the Purchaser with a favorable opinion, dated the Closing Date,
addressed to the Purchaser, of the Company's counsel, in form and substance
satisfactory to the Purchaser and its counsel, to the effect set forth in
EXHIBIT 5.1 hereto.
SECTION 5.2 GOOD STANDING AND TAX CERTIFICATES. The Company shall have
delivered to the Purchaser (a) copies of the Company's and its Subsidiaries'
respective Articles of Incorporation, including all amendments thereto,
certified by the Secretary of State or other appropriate official of each of
their jurisdictions of incorporation, (b) certificates from the Secretary of
State or other appropriate official of their respective jurisdictions of
incorporation to the effect that each of the Company and its Subsidiaries is in
good standing or subsisting in such jurisdiction, (c) a certificate from the
Secretary of State or other appropriate official in each state in which the
Company or any Subsidiary is qualified to do business to the effect that the
Company or the applicable Subsidiary is in good standing in such state, and
(d) a copy of the Company's and the Subsidiaries' By-Laws including all
amendments thereto, certified by the Company's Secretary.
SECTION 5.3 ENVIRONMENTAL. Except for those properties identified on
Schedule 2.21, prior to the Closing Date, there shall be no Hazardous Discharge,
Environmental Complaint or material adverse change in the assets or liabilities,
the business or condition, financial or otherwise, the operations, or prospects
of the Company and its Subsidiaries, and the Chairman of the Board of the
Company shall have delivered to the Purchaser a certificate, dated the Closing
Date, to such effect.
SECTION 5.4 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company contained in this Agreement or in any Schedule or
Exhibit delivered pursuant hereto shall be true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date, and the Company shall have delivered to
the Purchaser a certificate by the Chairman of the Board, dated the Closing
Date, to such effect.
SECTION 5.5 PERFORMANCE OF AGREEMENTS. Each and all of the agreements of
the Company to be performed on or before the Closing Date pursuant to the terms
hereof shall have
21
<PAGE>
been duly performed, and the Company shall have delivered to the Purchaser a
certificate executed by the Chairman of the Board, dated the Closing Date, to
such effect.
SECTION 5.6 COMPANY'S CERTIFICATE. The Company shall have delivered to
the Purchaser a certificate, dated the Closing Date and executed by its
President, in the form attached hereto as EXHIBIT 5.6.
SECTION 5.7 INTRA-COMPANY DEBT. Except as identified and described on
Schedule 5.7, the 1996 Settlement Agreement, 1996 Morgan Settlement Agreement,
and this Agreement, all indebtedness, other than travel and similar advances, of
the shareholders, directors, officers and employees of the Company and any of
its Subsidiaries to the Company shall have been repaid in full.
SECTION 5.8 RESIGNATIONS AND ELECTION. At the Closing, the Purchaser
shall receive the resignations, effective as of the Closing, of all of the
officers of the Company as identified on Schedule 5.8. Once the Closing has
occurred, the Board of Directors of the Company immediately shall elect Fife
President and Chief Executive Officer of the Company and Mr. Fife shall be
appointed to the Board of Directors. R. Dee Erickson and Jay Sheen shall have
resigned from the Board of Directors effective ten (10) days after such notice
of resignation. Replacement directors shall be appointed pursuant to the terms
of the 1993 Settlement Agreement.
SECTION 5.9 PROCEEDINGS. All proceedings to be taken in connection with
the transactions contemplated hereby and all documents incident thereto shall be
satisfactory in form and substance to the Purchaser and its counsel, and the
Purchaser shall have received copies of all such documents and other evidence as
it or its counsel may reasonably request in order to establish the consummation
of such transactions and the taking of all proceedings in connection therewith.
SECTION 5.10 FAIRNESS OPINION. The Company has solicited and received a
fairness opinion from Brown-Wright & Associates, Inc., dated June 10, 1996, a
copy of which is attached hereto as EXHIBIT 5.10, which addresses the
transaction contemplated herein.
SECTION 5.11 TERMINATION EXPENSES. If this Agreement is terminated due to
Company's failure to satisfy any one or more of the conditions set forth in
Article IV and this Article V, then the Company shall pay the Purchaser the
fees, costs and expenses incurred by the Purchaser in its negotiation of the
Letter of Intent, this Agreement, its due diligence review including, but not
limited to, the procurements of surveys, and title related documents and
environmental reports and any other fees, costs and expenses incurred by the
Purchaser in contemplation of its completion of this transaction, including, but
not limited to costs associated with litigation.
SECTION 5.12 FIFE EMPLOYMENT AGREEMENT. The Company shall employ Fife, as
President, on terms to be negotiated, which shall provide reasonable
compensation for services to be rendered, provided that the compensation in any
year shall not exceed Two Hundred
22
<PAGE>
Thousand Dollars ($200,000). Notwithstanding anything to the contrary contained
herein, the payment of compensation in excess of that provided in the employment
agreement shall be used to reduce any obligations due or to become due under the
Note.
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to sell the Purchased Shares to Purchaser on
the Closing Date is subject to the following conditions:
SECTION 6.1 OPINIONS OF PURCHASER'S COUNSEL. Purchaser shall have
furnished the Company with an opinion, dated the Closing Date, addressed to the
Company, of Wildman, Harrold, Allen & Dixon, to the effect set forth in
EXHIBIT 6.1 hereto.
SECTION 6.2 GOOD STANDING CERTIFICATES. The Purchaser shall have
delivered to the Company (a) copies of the Purchaser's Articles of
Incorporation, including all amendments thereto, certified by the Secretary of
State or other appropriate official of the State of Delaware, (b) certificates
from the Secretary of State or other appropriate official of the State of
Delaware, to the effect that the Purchaser is in good standing, (c) a
certificate from the Secretary of State or other appropriate official in each
state where the Purchaser is qualified to do business to the effect that the
Purchaser is in good standing in such state, and (d) a copy of the Purchaser's
By-laws including all amendments thereto, certified by the Purchaser's
Secretary.
SECTION 6.3 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Purchaser contained in this Agreement shall be true and
correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date; Purchaser
shall have delivered to the Company a certificate, dated the Closing Date, to
such effect.
SECTION 6.4 PROCEEDINGS. All proceedings to be taken in connection with
the transactions contemplated by this Agreement and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Company
and its counsel.
SECTION 6.5 VERIFICATION. Purchaser shall provide to the Company a
certification of its sole shareholder's net worth, which net worth shall be not
less than that shown on the financial statements previously submitted to the
Company. A copy of the resume of Purchaser's sole shareholder is attached
hereto as EXHIBIT 6.5.
23
<PAGE>
ARTICLE VII
SURVIVAL OF REPRESENTATIONS; INDEMNITY
SECTION 7.1 SURVIVAL OF REPRESENTATIONS AND COVENANTS. (a) The
respective representations and warranties of the Company and Purchaser contained
in this Agreement or in any Schedule or Exhibit delivered pursuant hereto shall
survive the Closing Date for a period of two years, excepting fraud and
applicable tax statutes of limitation. Furthermore the covenants contained in
Sections 1.3, 7.2, 8.1, 8.5, 10.1 and 10.3 shall survive the Closing Date for a
period of two years, unless otherwise specifically provided for herein.
Furthermore, the terms and conditions of the Option set forth in Section 1.3
shall survive the Closing Date for a period of ten (10) years. The limitations
set forth in Section 5.12 shall expire when the Note is paid in full.
(b) In the event that Purchaser wishes to make a claim of offset against
amounts due under the Note, Purchaser must first submit a written notice,
providing a description of the claim being made to the Board of Directors of the
Company. The Board of Directors shall appoint a committee consisting of three
(3) minority shareholders for the purpose of investigating the claim made by
Purchaser. This committee shall have forty-five (45) days from the date of the
submission of the notice of the claim to reach a determination as to whether the
claim will be honored or denied. Reasonable attorney fees and costs associated
with such investigation shall be paid for by the Company. In the event the
claim is denied by the Committee, Purchaser may either: (i) file a suit in
accordance with the jurisdictional requirements set forth in Section 10.3
hereof, where the issue will be decided before a judge and not a jury, or (ii)
submit the issue to binding arbitration before the American Arbitration
Association.
SECTION 7.2 INDEMNIFICATION.
(a) The Company agrees to indemnify and hold Purchaser and its
shareholders, officers, directors, attorney, agents, successors and assigns
harmless from and against any damages, losses or expenses suffered or paid,
directly or indirectly, as a result of any and all claims, demands, suits,
causes of action, proceedings, judgments and liabilities, including reasonable
counsel fees incurred in litigation or otherwise, assessed, incurred or
sustained out of, (i) the failure of any representation or warranty made by the
Company on behalf of itself and/or any of its Subsidiaries or Affiliates in this
Agreement or in any Schedule or Exhibit delivered hereto; or (ii) Purchaser's
negotiation, execution and/or consummation of the Letter of Intent, this
Agreement, and the transactions contemplated hereby and hereunder; provided,
however, the indemnification provisions herein shall not apply to fraud or
wilful misconduct on the part of Purchaser.
(b) The Purchaser agrees to indemnify, and hold the Company and its
shareholders, officers, director and agents harmless from and against any
damages, losses or expenses suffered or paid, directly or indirectly, as a
result of any and all claims, demands, suits, causes of action, proceedings,
judgments and liabilities, including reasonable counsel fees incurred in
litigation
24
<PAGE>
or otherwise, assessed, incurred or sustained out of the failure of any
representation or warranty made by the Purchaser in this Agreement or in any
Schedule or Exhibit delivered hereto; provided, however, the indemnification
provisions herein shall not apply to fraud or wilful misconduct on the part of
the Company and its shareholders, officers, directors or agents.
(c) Purchaser agrees to take all actions necessary to cause the Company to
honor its obligations to indemnify the Company's officers and directors, to the
fullest extent permitted by law, including, but not limited to, the advancement
of their legal fees and costs in connection with all present and future
litigation involving them in their capacities as officers and directors of the
Company.
(d) The foregoing indemnification provisions are in addition to, and not
in derogation of, any statutory or common law remedy any Party may have for
breach of representation, warranty, or covenant.
(e) The obligations to indemnify and hold harmless pursuant to this
Section 7.2 shall survive the consummation of the transactions contemplated
hereby.
ARTICLE VIII
POST-CLOSING COVENANTS
SECTION 8.1 LITIGATION SUPPORT. In the event and for so long as Purchaser
actively is contesting or defending against any charge, complaint, action, suit,
proceeding, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, circumstance,
status, condition, activity, occurrence, action, failure to act, or transaction
on or prior to the Closing Date involving any of the Company and its
Subsidiaries, each of the other Parties shall cooperate with it and its counsel
in the contest or defense, make available their personnel, and provide such
testimony and access to their books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
Purchaser (unless the Purchaser is entitled to indemnification therefor).
SECTION 8.2 TRANSITION. No officer or director of the Company shall take
any action that primarily is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier, or other business
associate of any of the Company and its Subsidiaries from maintaining the same
business relationships with the Company and its Subsidiaries after the Closing
as it maintained with the Company and its Subsidiaries prior to the Closing.
SECTION 8.3 CONFIDENTIALITY. Each officer and director of the Company
shall treat and hold as confidential all of the information concerning the
businesses of the Company and its Subsidiaries (the "INFORMATION"), refrain from
using any of the Information except in connection with the affairs of the
Company. If any of the officers or directors of the Company is requested or
required in any legal proceeding to disclose any of the Information, then that
Person shall
25
<PAGE>
notify the Purchaser promptly of the request or requirement so that the
Purchaser may seek an appropriate protective order or waive compliance with the
provisions of this Section 8.3. If, in the absence of a protective order or the
receipt of a waiver hereunder, any Person is, on the advice of counsel,
compelled to disclose any of the Information to any tribunal or else stand
liable for contempt, that Person may disclose the Information to the tribunal;
provided, however, that the disclosing Person shall use his, her or its best
efforts to obtain an order or other assurance that confidential treatment shall
be accorded to such portion of the Information required to be disclosed as the
Purchaser shall designate. The foregoing provisions shall not apply to any
Information which is generally available to the public or otherwise in the
public domain immediately prior to the time of disclosure.
SECTION 8.4 RESTRICTIONS ON TRANSFERS OF NOTE. The Note shall be
imprinted with a legend substantially in the following form:
THIS NOTE WAS ORIGINALLY ISSUED ON JULY 3, 1996, PURSUANT TO
THE TERMS SET FORTH IN A STOCK PURCHASE AGREEMENT DATED AS
OF JULY 3, 1996 (THE "PURCHASE AGREEMENT") AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS
SET FORTH IN THE PURCHASE AGREEMENT. THE ISSUER OF THIS
NOTE SHALL FURNISH A COPY OF THESE PROVISIONS TO THE
HOLDER HEREOF WITHOUT CHARGE UPON WRITTEN REQUEST.
If the Company desires to transfer the Note, it must (i) obtain and provide to
Purchaser a written opinion satisfactory to Purchaser in form and substance
satisfactory to the Purchaser by reason of experience to the effect that the
holder may transfer the Note as desired without registration under the
Securities Act and (ii) obtain and provide to Purchaser a written undertaking
executed by the desired transferee satisfactory to the Purchaser in form and
substance agreeing to be bound by the restrictions on transfer contained herein.
SECTION 8.5 REVERSE SPLIT. Subsequent to the Closing Date and at the
earliest possible date, and in any event no later than six (6) months following
the Closing, the Company shall cause a 1,000 to 1 share reverse split of the
Company's Stock to the shareholders of record thirty (30) days prior to the
contemplated closing of the Reverse Split (as defined below) (the "RECORD
DATE"), at Three and 35/100 Dollars ($3.35) per share, with fractional
shareholders given the option to either purchase additional fractional shares to
round up to one whole share following the reverse split or sell their fractional
shares for cash to the Company (the "REVERSE SPLIT"). The parties agree that
Purchaser may, at its option, be issued additional shares at a price per share
equal to Three and 35/100 Dollars ($3.35) on the same terms as provided in the
Option, so that after the Reverse Split, the Purchaser shall own fifty and
one/half percent (50.5%) of the outstanding shares of the Company.
26
<PAGE>
The Reverse Split shall be conditioned upon:
(i) The Company complying with applicable provisions of federal and
state law, including, without limitation, Section 13(e) of the Securities
and Exchange Act of 1934, and the regulations promulgated thereunder, to
the extent required;
(ii) The Company shall have six (6) months from the date of Closing to
complete the Reverse Split subject to receipt of appropriate governmental
regulatory clearances and approvals; and
(iii) The notice to the Company's shareholders of the Reverse Split
shall include disclosure that the Company may subsequently elect to take
steps to take the Company private.
Any financing needed to complete the Reverse Split shall be personally
guaranteed by Fife, the sole shareholder of Purchaser.
Any shares redeemed by the Company pursuant to the Reverse Split (the
"RETURNED SHARES") shall be designated by the Company as such. Immediately
following the conclusion of the Reverse Split and subject to compliance with all
applicable federal and state securities laws, the Returned Shares shall be
offered for sale by the Company to the remaining shareholders of the Company
other than Purchaser or its affiliates, on a pro rata basis (the "RETURNED
SHARES OPTION"), at a purchase price per share equal to Three and 35/100 Dollars
($3.35) (the "RETURNED SHARE PURCHASE PRICE"). Twenty-five percent (25%) of the
Returned Share Purchase Price shall be payable immediately in cash upon exercise
of the Returned Share Option with the remaining balance of Two and 51/100
Dollars ($2.51) per share being evidenced by a promissory note, payable in three
(3) years (the "RETURNED SHARES NOTE"). The Returned Shares Note shall bear
simple interest at the short term applicable federal rate as stated in June
1996, which interest shall be payable annually in arrears. Notice shall be
given to the shareholders of the availability of the Returned Share Option. In
the event the Returned Share Option is over-subscribed, then each of the
exercising shareholders may purchase the Returned Shares on a pro rata basis (as
determined by the number of shares each of the exercising shareholders holds as
of the Record Date). Payment of the Returned Shares Note shall be secured by a
pledge of the Returned Shares purchased pursuant to a stock pledge agreement to
be provided by the Company. Exercising shareholders purchasing Returned Shares
shall be required to apply any dividends, distributions or other payments made
to the shareholder of the Company on the Returned Shares to payment of the
unpaid balance of the Returned Shares Note. Returned Shares purchased by an
exercising shareholder shall be fully votable in accordance with the terms of
the Company's organizational documents and other agreements binding the Company.
The parties acknowledge that the shares of the Company being purchased from Anne
Morgan and Victoria Morgan pursuant to the 1996 Settlement Agreement shall not
be considered or be a part of the Returned Shares.
27
<PAGE>
ARTICLE IX
INTENTIONALLY OMITTED
ARTICLE X
MISCELLANEOUS
SECTION 10.1 EXPENSES. If the transaction contemplated hereunder is
consummated, the Company shall pay the out-of-pocket fees and expenses,
including attorneys fees and costs, incurred by Purchaser in connection with the
negotiation, preparation, execution and delivery of the Letter of Intent, this
Agreement, the 1996 Settlement Agreement and any other agreements and documents
contemplated thereby and its due diligence investigation including, but not
limited to, procurement of surveys and other title related documents and
environmental reports.
SECTION 10.2 GOVERNING LAW. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of Utah.
SECTION 10.3 JURISDICTION. The Parties irrevocably agree that any
judicial proceeding brought against any of the Parties on any dispute arising
out of this Agreement or any matter related hereto shall be brought in the Third
District Court of the State of Utah, or in the United States District Court for
the Central Division of Utah, and each of the Parties accepts for himself,
herself or itself the exclusive jurisdiction of the aforesaid courts, and
irrevocably consents to the jurisdiction of such court, waives any objection to
venue in such court and agrees to be bound by any judgment rendered thereby in
connection with this Agreement. The foregoing consents to jurisdiction shall
not constitute general consents to service of process in the State of Utah for
any purpose except as provided above and shall not be deemed to confer rights on
any person other than the Parties.
SECTION 10.4 CAPTIONS. The Article and Section captions used in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
SECTION 10.5 PUBLICITY. Except as otherwise required by law, no Party
shall issue any press release or make any other public statement, in each case
relating to or connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior approval of the other Parties to
the contents and the manner of presentation and publication thereof.
SECTION 10.6 NOTICES. Any notice or other communications required or
permitted hereunder shall be sufficiently given if delivered in person or sent
by telefax or by registered or certified mail, postage prepaid, addressed as
follows:
28
<PAGE>
If to Purchaser: John Fife, President
c/o Inter-Mountain Capital Corp.
360 East Randolph Street
Suite 2402
Chicago, Illinois 60601
Telephone: (312) 565-1569
Facsimile: (312) 819-9701
with a copy to: Alan B. Roth, Esq.
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive
Chicago, Illinois 60606-1229
Telephone: (312) 201-2633
Facsimile: (312) 201-2555
If to the Company: R. Dee Erickson, Chairman of the Board
Utah Resources International, Inc.
297 West Hilton Drive, Suite #4
St. George, Utah 84770
Telephone: (801) 628-8080
Facsimile: (801) 299-8580
with a copy to: John Dahlstrom, Esq.
Jardine, Linebaugh & Dunn
370 East South Temple
Suite 400
Salt Lake City, Utah 84111-1290
Telephone: (801) 532-7700
Facsimile: (801) 355-7725
or such other address as shall be furnished in writing by any such party, and
such notice or communication shall be deemed to have been given as of the date
so delivered, sent by telex or mailed.
SECTION 10.7 PARTIES IN INTEREST. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law. This Agreement shall be binding upon and shall inure to the benefit of
the Parties and their respective heirs, executors, administrators, successors
and assigns.
SECTION 10.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
SECTION 10.9 ENTIRE AGREEMENT. This Agreement, including the other
documents referred to herein which form a part hereof, contains the entire
understanding of the Parties with
29
<PAGE>
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings among the Parties with
respect to such subject matter.
SECTION 10.10 AMENDMENTS. Any provision of this Agreement can be waived,
amended, supplemented or modified by a written agreement of Purchaser and the
Company.
SECTION 10.11 SEVERABILITY. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
SECTION 10.12 THIRD PARTY BENEFICIARIES. Each Party intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the Parties.
SECTION 10.13 TERMINATION OF AGREEMENT. Certain of the Parties may
terminate this Agreement as provided below:
(a) the Purchaser and the Company may terminate this Agreement by mutual
written consent at any time prior to the Closing; or
(b) the Purchaser may terminate this Agreement by giving written notice to
the Company any time prior to the Closing in the event the Company is in breach,
and the Company may terminate this Agreement by giving written notice to the
Purchaser at any time prior to the Closing in the event the Purchaser is in
breach, of any material representation, warranty, or covenant contained herein
in any material respect.
SECTION 10.14 CONSTRUCTION. The language contained herein shall be deemed
to be the language chosen by the Parties to express their mutual intent, and no
rule of strict construction shall be applied against any Party. Any reference
to any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The Parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any Party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty, or covenant.
SECTION 10.15 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof. The parties acknowledge that certain of the Schedules and
Exhibits hereunder have not been completed at the execution hereof and that the
Parties agree that all such Exhibits and Schedules shall be completed and
mutually agreed upon prior to Closing.
30
<PAGE>
SECTION 10.16 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event any of
the provisions hereof are not performed in accordance with their specific terms
or otherwise are breached. Accordingly, each of the Parties agrees that the
other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to any other remedy to which they may be
entitled, at law or in equity).
IN WITNESS WHEREOF, the Purchaser and the Company have caused their
corporate names to be subscribed by an officer duly authorized, all as of the
day and year first above written.
Purchaser:
INTER-MOUNTAIN CAPITAL CORP.,
a Delaware corporation
By:
---------------------------------------
Its:
---------------------------------------
Company:
UTAH RESOURCES INTERNATIONAL, INC.,
a Utah corporation
By:
---------------------------------------
Its:
---------------------------------------
31
